You can now buy the equity not just for its growth prospects, but for the income it generates as well. Investors, understandably, like the sound of that, sending the shares up by 15pc on the day it was announced, and pushing the value of the company up to an all-time high, more than recovering all the post-pandemic losses it suffered on its move into headsets.
And yet it will surely just be the first of the technology giants to start returning cash to its owners. Apple stopped paying out anything under Steve Jobs – he thought it was a crazy waste of money that he could spend on new gadgets instead – and has only paid out the minimum possible since he died.
At some point that will have to increase. Amazon announced blockbuster profits last week, and moves such as showing ads on Prime should drive earnings even higher, so it is surely only a matter of time before it starts a payout.
Alphabet, the owner of Google, may not be able to resist paying something out of its $113bn cash pile for much longer. With surging revenues from its crackdown on password sharing, Netflix is making lots of money, and may be forced to return some of it.
Nvidia will have plenty of room to increase the paltry 0.3pc it currently pays to its shareholders, while if Tesla can afford to pay Elon Musk $50bn, assuming he can overturn the court ruling against that decision, surely it can afford to pay something to its shareholders as well?
The giant tech companies will start to rival the oil, pharma and banking conglomerates for their ability to deliver huge sums of money for their shareholders every quarter. Given their size, their semi-monopolistic positions, and their growth rates, they will probably quickly overtake them.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
